Americans who bought new homes or refinanced their mortgages in recent months may have done so at the right time.
The average rate on a 30-year fixed-rate mortgage rose to 3.02 percent, mortgage financing giant Freddie Mac said Thursday. It is the first time the most popular home loan rate in the United States has risen above 3% since July and for the fifth consecutive week it has risen or remained stable.
Mortgage rates fell for most of 2020 after the Covid-19 pandemic ravaged the economy. This helped drive the biggest boom in mortgage lending since before the financial crisis, fueled by refinancing. When rates reached 2.98% in July, it was the first time they had dropped 3% in about 50 years of record.
Recent upward movements are in stark contrast: more vaccinations in the United States and recent advances in the latest coronavirus relief bill have illuminated investors’ view of the economy, a key variable in determining indebtedness.
Mortgage rates tend to move in the same direction as 10-year Treasury yields, which have been rising. Treasury yields rise when investors feel safe enough in the economy to give up safe haven assets, such as bonds for the riskier, including equities. Last week, performance reached its highest level in a year.